Unpacking Special Economic Zones
SPECIAL Economic Zones (SEZs) are a geographical area within a country’s borders that enjoy special incentives. e main reason behind establishing such zones is to boost trade balance (increase exports); increase employment and skills transfer in that area; increase investment into the country; and to bolster innovation and mechanisation.
To encourage investments into these zones, the government can offer very attractive incentives that are both fiscal and non-fiscal. ese incentives could range from tax cuts/rebates, waivers in certain fees or retention quotas, looser labour laws and certain customs privileges.
According to the Zimbabwe Investment and Development
Agency (Zida), there has been an increased interest in SEZs throughout the country, and issued licences continue to increase.
Currently, there are nine privately-owned licences and six publicly-owned SEZs. Eight companies are now fully operational with a large number now at mobilisation stage. e sectors include medical, mining, engineering, agricultural and manufacturing.
e Zida Act stipulates that the agency may, by way of a gazetted notice, declare any area or premises to be a special economic zone. e geographical area of the zone shall be defined in the notice, and the agency may at any time amend, add or abolish any SEZ.
Currently, the major considerations for SEZ licences are skewed towards export orientation and import substitution. is is also accompanied by the social and economic impact these zones will have.
A lot of consideration is also placed on beneficiation of the locals and the long term environmental impact. Skills and technology transfer is key as the zones create employment opportunities, leading to the further development of our valued human resource asset base.
Zida also encourages value addition and this is reflected in the amount and tenure of their incentives. e more a company processes in Zimbabwe, the greater and longer the incentives last.
e agency, in consultation with the Minister of Finance and Economic Development, shall publish specific guidelines for investments, which include general incentives that may be applicable to licensed investors.
e incentives do not discriminate between foreign or domestic investors, and categories shall be tiered among primary producers, exporters, and investors involved in value-addition/import-substitution projects.
Any interested investor, both local and foreign, wishing to be governed by an SEZ, should locate to the designated zones and apply to Zida through their application form available on www.zidainvest.com.
After licensing, Zida will be having an annual monitoring and evaluation exercise, to ascertain that the projects are at the agreed stages. is is part of the investor after-care service which is found in Zida’s One-Stop Investment Services Centre (OSISC). e visits are not only to monitor the licensees, but to offer services in challenges they are facing as well.
Existing government-run SEZs include the Imvumela and the Belmont Corridor (Kelvin, Donnington and Wetsondale) in Bulawayo; Beitbridge; Sunway City in Harare; Masuwe in Victoria Falls; and Fernhill in Mutare.